(THIS STORY WRITTEN BY ALEX DEROSIER, MISSOURINET CONTRIBUTOR)
Senior care and advocacy groups are speaking out against a Missouri House proposal to cut a property tax rebate for elderly and disabled renters. They say redirecting funds used for the tax credit to shore up cuts to health care could affect 100,000 people in the state who depend on the payment to afford basic necessities.
The AARP and Missouri’s Area Agencies on Aging testified Monday evening in Jefferson City against redirecting funding used for the tax credit. The credit is known as the circuit-breaker, which reimburses low-income seniors and disabled residents for property taxes.
About 200,000 people in Missouri currently receive the circuit-breaker tax credit, roughly half of whom are renters. The payments for renters range from $460-750 a year. The proposal to stop payments to renters was introduced last week as an option to help cover cuts to home and community based health services. Gov. Eric Greitens (R) has called for a $52 million cut for those services in his budget recommendations, though subsequently recommended $42 million from the master tobacco settlement be used to pay for the program this year. Funds redirected from the circuit-breaker would serve as a permanent source of funding for home and community services.
House Budget Chairman Scott Fitzpatrick (R-Shell Knob) introduced the proposal, though it officially comes from the committee itself. Fitzpatrick says cutting off payments to renters and putting it into a senior services protection fund could bring the state $55-60 million to restore money Greitens has asked lawmakers to cut.
Then Gov. Jay Nixon (D) proposed a similar plan in 2013, but ended up vetoing the measure when it reached his desk.
Fitzpatrick and several of his Republican colleagues on the Budget Committee argue that renters don’t pay property taxes, and the money paid out to them should instead be used to cover healthcare costs. “I think that more important than this property tax credit for people who aren’t paying property taxes is preserving services for people who are vulnerable,” Fitzpatrick says.
State Rep. David Wood (R-Versailles) says seniors would value continued health care services over a small yearly payment.
“Between getting $500 and having in-home health services or the potential of going to a nursing home, to me that is a pretty easy choice,” Wood said.
AARP Associate State Director for Advocacy Jay Hardenbrook calls that a “false choice,” and said renters deserve a payment just as much as homeowners do.
“I would challenge any fiscal conservative to say that customers don’t pay taxes,” he says. “And in this case, they certainly are.”
Hardenbrook says the circuit-breaker tax credit is a “bright flashing light” for people in the General Assembly who don’t like tax credits to begin with, adding that the proposal was a last-minute effort to fund home and community based services. He pointed to other tax credits that wouldn’t impact vulnerable Missourians as a better place to start making cuts, such as the historic preservation credit.
Catherine Edwards, director of Area Agencies on Aging, told the House Budget Committee that targeting renters who receive the tax credit hits the state’s most vulnerable recipients.
“It may pay for eyeglasses or dentures if you cannot have those paid by Medicare.” Edwards testified to the committee, emphasizing the tax credit’s uses for low and fixed income seniors. “It can pay for pajamas. It can pay for toiletries in the nursing home. It can pay for slippers. It can pay for a luxury like a frozen waffle you can put in your toaster.”
Edwards echoes what Hardenbrook says, that comparing healthcare to funding for housing was a “false choice”, and that the state should not “rob one side to pay for the other.”
Married seniors or disabled renters who make less than $29,500 a year are eligible for the circuit-breaker tax credit. Single renters must make under $27,500. Payments range from a maximum for $750 for renters and as little as $460 a year, with payments issued in the form of a tax refund.
Fitzpatrick’s circuit-breaker proposal has not been filed as a traditional bill because it was introduced after the deadline to submit new legislation on March 1.
Instead it has been unofficially filed as a “committee filed bill”, something Fitzpatrick said is new to the assembly.
The Budget Committee will hold another hearing on the bill Wednesday morning at 8.